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With Canada Day just around the corner, it is a timely reminder for employers to ensure they are complying with their obligations surrounding public (statutory) holidays. This article will highlight the key considerations for employers to determine whether their employees are entitled to time off, and if so, how to calculate public holiday pay. 

What are They?

Statutory holidays, also called public holidays, refer to holidays legislated by the federal or provincial and territorial governments. On these days, most employees are entitled to the day off from work with public holiday pay. 

When are They?

Public holidays vary across provinces. In Ontario, there are nine public holidays recognized under the Employment Standards Act, 2002 (“ESA”). They include New Year’s Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Christmas Day, and Boxing Day. 

When the public holiday falls on a day the employee would ordinarily be working, the employee is entitled to the day off from work with public holiday pay. Since Canada Day falls on a Friday this year, many employees will simply take that day off from work. 

Employers are not off the hook if the public holiday falls on a day that would not ordinarily be a working day for the employee, like a weekend. In this case, employers are obligated to provide a substitute day off with public holiday pay as if it were a public holiday. This must be scheduled no more than three months after the public holiday or no more than twelve months after the public holiday if the employee provides written consent. Alternatively, an employer and employee can agree in writing that the employee will receive public holiday pay but no substitute day off.

Who is Entitled to Time Off?

There are two exceptions to the general entitlement to time off from work and to holiday pay. The first is where the employee, without reasonable cause, failed to work their last regularly scheduled day of work before the public holiday or their first regularly scheduled day of work after the public holiday. In Ontario, there is no requirement as to how long an employee must have been employed before becoming entitled to holiday pay or time off.

Another exception is for employees who work in specified businesses. Those employed by hotels, motels, tourist resorts, restaurants, taverns, hospitals, or continuous operations can be required to work on a public holiday. If so, employers must provide these employees with either (a) their regular wages for hours worked on the public holiday plus a substitute day off with public holiday pay; or (b) public holiday pay plus premium pay for hours worked on the public holiday. There are also special rules for retail employees.

The Ontario Labour Relations Board confirmed in Bowater Forest Products Inc v Learningthat for such continuous operations, it is up to the employer to determine whether to offer premium holiday pay instead of a substitute day off, even where employees prefer the substitute day. 

Can Employers Contract out of ESA Holiday Entitlements?

Work is not actually restricted on public holidays and some employers may want to enter into agreements with employees that provide they will work on the public holiday. Although employers cannot contract out of the minimum statutory entitlements provided for under the ESA, these types of arrangements are permitted. 

For example, employees can agree to work where the public holiday falls on a day that would ordinarily be a working day. The same applies to employees where the public holiday falls on a day that would not ordinarily be a working day. In both cases, if the employee works on the public holiday, employers must pay regular wages for the day and offer either a substitute day off with public holiday pay or public holiday pay plus premium pay for each hour worked that day.

How Much is Public Holiday Pay and Premium Pay?

In Ontario, public holiday pay includes all the regular wages and vacation pay earned by the employee in the four weeks before the public holiday divided by 20. The Ministry of Labour, Training and Skills Development offers a Public Holiday Pay Calculator. Employees on leave or layoff are entitled to public holiday pay. However, if they earned zero wages and/or vacation pay in the four-week period prior to the public holiday, their public holiday pay will be $0.

Premium pay is calculated as one and a half (1.5) times the employee’s regular pay rate. Employees are not entitled to receive both premium pay and overtime pay for the same hours. 

Takeaways

Employers can rest easy on Canada Day knowing that they have complied with their obligations under the ESA. In summary: 

1. If the public holiday falls on a day that is ordinarily a working day, employees are entitled to take the day off with public holiday pay.

1. Employees who work in exempt business can be required to work on the public holiday. However, employers must provide a substitute day off with public holiday pay or public holiday pay plus premium pay for each hour worked. Employers choose which applies.

1. If the public holiday falls on a day that is not ordinarily a working day, employers must provide a substitute day off with holiday pay or enter an agreement to provide public holiday pay but no day off.

1. Employees can agree in writing to work on the public holiday. Employers must pay regular wages for that day and provide a substitute day off with public holiday pay or provide public holiday pay plus premium pay.

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For further information, please contact a member of our growing team:Leslie Dizgun, Paul Schwartzman, or Alyssa Jagt.

This publication is intended only to provide general information. It should not be relied on as legal advice.

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